Cryptocurrency boom in 2017 made it increasingly popular among the general public as well as market participants, and this led to an upsurge in cryptocurrency trading and exchange venues. Before this surge, it was part of a tighter knit community, and Kraken established its niche in the cryptocurrency industry by being transparent and ensuring safe transactions.
Overview of Kraken’s History:
Kraken, renowned as the one of the best bitcoin exchange, was conceptualized in 2011 when its founder Jesse Powell went to help Mt. Gox after being hacked. Domiciled in San Fransico, it was established in 2013, and the initial exchange only offered bitcoin, litecoin, and euro trades.
Powell’s realization of the import of bitcoin in the ecosystem led to Kraken’s founding. It took two years to launch this exchange, and in 2013 it united with other American bitcoin players to establish DATA (Digital Asset Transfer Authority). In the same year, Fidor, an online German bank regulated by BaFin, partnered with Kraken to allow deposits and withdrawals from Kraken accounts. World’s first cryptocurrency bank was created as a result of this collaboration.
It joined the small pool of bitcoin exchanges that offered margin trading, in 2015 and appointed Howard Bernstein as the Chief Compliance Officer. Kraken developed a private financial forum for trading secrets to set up a dark pool for bitcoins.
New York imposed BitLicense on cryptocurrency exchanges that Kraken refused to pay on the grounds of it being unfair and counterproductive and withdrew their service and concentrated more on Canadian markets.
It’s security’s reputation was challenged in 2016 with multiple claims emerging about compromised accounts of clients and stolen funds. Kraken produced clarifications, after conducting an internal investigation, that its databases weren’t compromised. They’ve strived towards ensuring client security and provided extra security measures like two-factor authentication and the Global Settings Lock. Fiat trading was launched in 2017 while tackling numerous DDoS attacks and performance issues. Security wasn’t compromised but a performance upgrade suspended trading for 48 hours. They withdrew their services from Japan because of unsustainable expenses.
Jesse Powell, the founder and current CEO of Kraken, went to California State University, Sacramento where he received a degree in philosophy with a concentration in Ethics and Law. Though not an employee, he assisted in bringing back Mt Gox bitcoin exchange’s site online after attacks by hackers. Powell became aware of the bitcoin’s significance and decided to start a cryptocurrency exchange. His accomplishments are not limited to the cryptocurrency sector as he was the founder and CEO of Lewt.inc, and Internet Ventures and holdings, which were both related to gaming. He has held the position of a board member for the Verge Center for the Arts, Sacramento since 2010 to the present. Powell has been an advocate of the adoption of cryptocurrency and has adamantly criticized any attempts to regulate it.
What do they do?
Kraken aims to build the internet of money and is one of the most trusted places to trade cryptocurrency online. It provides a platform with superior financial stability and maintains full reserves, strong banking relationships while strictly complying with the legal standards.
An accessible and easily navigable website provides a smooth interface for the exchange of cryptocurrency. Global support is offered 24/7/35, and the team is renowned for delivering swift and excellent customer service. Client engagement specialists are available all round the clock to prevent missed opportunities during downtime.
Kraken has been developed, keeping the needs of different institutions in mind, e.g., Investment banks and brokers, Mutual and pension funds, Insurance firms, crypto-related business, etc. Corporate clients also acquire priority access to Kraken’s trade desk. It empowers the investor to map their financial route in the cryptocurrency sector. Competitive prices, along with exceptional liquidity, are offered to institutions of all sizes.
Kraken was founded to provide a platform to lower the dependency of bitcoin’s market on a single exchange. After launching the beta version, $5 million were raised by Kraken’s parent company, Payward during Series A funding. Series B funding was led by SBI ventures to expand the reach of the exchange and was also supported by Japan’s leading foreign exchange broker, Money Partners Group.
Kraken’s office location spans the globe with its offices in US, Japan, EU, Canada and supports fiat pairs from the respective countries. Services are offered worldwide with certain restrictions in New York and other areas. It allows cryptocurrency, SEPA bank transfer, EFT (electronic funds transfer) for CAD, US, Japanese, and Canadian domestic wire transfers for funding and withdrawals.
They remain unbiased with different cryptocurrencies and smoothly introduced fork currencies like Bitcoin Cash or Ethereum Classic. Hasty decisions regarding addition of new coins were avoided to ensure the comprehensive success of cryptocurrency space. They’ve avoided accusations of market manipulation and insider trading by giving due diligence to research before introducing a new currency. Kraken discovered Namecoin’s vulnerability before launching the new coin on its platform. Their forethought also saved them from the malleability scare in 2014 as they had already realized and addressed the problems of sole dependence on transaction IDs for tracking transfers.
Kraken played a critical role in the formation of JADA ( Japan Authority of Digital Assets), the first government-backed bitcoin regulatory body, and DATA ( Digital Asset Transfer Authority).
Bloomberg terminal also added Kranken as one of the first exchanges to track the price of bitcoin. Tim Swanson, the author of Great Wall of Numbers, nominated them as one of the ten most promising blockchain startups.
Fees vary according to the total cost of the order, currency pair being traded, customer’s 30-day trading volume. Opening and rollover fees are applicable during margin trading.
Paying attention to security
Kraken has sustained and flourished in the industry by having a very secure platform. Regular audits are performed to provide a backup for its operations. An auditor verifies Kraken’s balances and publishes for public verification. Customers can independently confirm the data, and this transparency establishes Kraken’s reputation in the cryptocurrency sector.
Two-factor authentication is required for logging in, but the platform offers up to five-factor authentication. Setting up a master key is recommended to prevent any hackers from gaining access to your accounts. Enabling Global Settings Lock (GSL) is recommended for longer trades to prevent anyone from changing the email or withdrawal address.
A nonpublic email address with PGP is recommended to thwart potential hackers and Kraken encourages encrypting sensitive information.
Kraken’s verification process has five tiers from zero to four:
Tier zero: After the submission of an email address, the platform can be accessed freely while no trades, deposits, or withdrawals are allowed.
Tier one: Submission of full name, date of birth, country, and telephone number is required to trade exclusively in digital currencies. Withdrawals are limited up to $2,500 per day and $20,000 per month.
Tier two: Fiat currencies can be used for trading, and their withdrawals are limited to $2,000 per day and $10,000 per month, but this varies from country to country. The withdrawal limit for cryptocurrencies is $5,000 per day and $10,000 per month. Verification of the first two tiers only requires an hour.
Tier three: Identification proof and address proof are required for this tier, and it increases the funding limits.
Tier four: An application form along with KYC documents must be completed and signed, and its verification takes about one to five days. Withdrawal limits are raised to an even higher level.
Kraken prides itself for providing services to over 4 million customers in 200 different countries. The exchange raised over $13.5 million from 2264 investors on BnkToTheFuture, an online investment platform. According to the Coin Market Cap, Kraken is currently the 33rd biggest cryptocurrency exchange in adjusted trading volume. The daily trading volume of the exchange is around $326.3 million. Kraken has aimed for a valuation of four billion dollars this year.
Kraken stands out amongst its competition:
1. Binance: Founded in China, this global cryptocurrency exchange provides a trading platform for more than 100 cryptocurrencies. It offers competitive prices to Kraken and has low trading fees.
2. Poloniex: A US-based company, Tristan D’Agosta, founded Poloniex, a cryptocurrency exchange in 2014. Circle Internet Financial Ltd bought it in February of 2018. Trading in fiat currencies is unavailable, but they charge low fees and provide a secure interface.
3. Coinbase: Coinbase is a digital currency founded in June 2012 and is based in San Francisco. Verification is required for cryptocurrency trading, and provisions to use fiat currency are provided.
With its foresight and assiduousness towards maintaining a secure and dependable platform for cryptocurrency trading, Kraken has set itself up as one of the leading cryptocurrency exchanges. It’s excellent reputation, and pursuit of extensive research before any additions to the coin library means that customers can confide in this exchange.